Maruti India to invest Rs 3000 cr towards capacity expansion

Maruti India, the nation’s largest car manufacturer has reportedly informed that they have plans to invest Rs 3,000 crore during the fiscal 2012-2013 which include their plans of expanding capacity and new model launches. At the moment, during the current financial year 2011-2012, Maruti India is investing Rs 4,000 crore for setting up a new assembly plant in the Manesar facility, at the same time concentrating on marketing, R&D and new model launches as informed by Mr Ajay Seth, the Chief Financial Officer of Maruti Suzuki India during a conference call.

Mr Seth also added saying that out of the Rs 4000 crore that is going to be invested during the current fiscal, one-third of the amount will be carried out to the next fiscal. Apparently, the Maruti India has plans to set up two new plants in the Manesar Facility, one of which will be operational by September, this year, however, the other plant will be up and functional during 2012-2013. These two plants are expected to keep a capacity of manufacturing 2.5 lakh units each, on which the investment of Rs 3625 crores is already done. Apart from this, the auto company also funding R 2,500 crores for its K-series engine plant to set up a dedicated R&D facility at Rohtak in Haryana. Maruti India, ia believed to have spent 0.7 % of its net sale on the R&D activities during the Q1 of 2011 compared to 1.1 percent expenditure during the last fiscal. The Maruti India had been successful in pumping 9.5 lakh units from its Gurgaon plant and 3.5 lakh units from its current Manesar Plant during the fiscal 2010-2011.

Due to the surging demand of the diesel cars in India, the company is increasing the production capacity of the diesel cars to 2.9 lakh units against its current 2.4 lakh units. Currently, Maruti India has the diesel variants for the Maruti Swift and Maruti Ritz hatchbacks and in the sedan segment, Maruti Swift Dzire and Maruti SX4 in the Indian market.

Mr Seth also commented that diesel car sales have increased by 60-80% overall, out of which Maruti India’s contribution is 21 % of the total sales during the first quarter of this fiscal year as compared to the 19% contribution towards the market sales in the same quarter last financial year. The company allegedly has plans to gear up the production of the diesel engines from its present 2.4 lakh units to 3 lakh units by the end of this fiscal. Diesel engines of Maruti India are produced with an entirely different entity called the Suzuki Powertrain India Ltd, located at the Manesar facility.

Mr Seth of Maruti India is reported to have remarked that they currently import about 15% components, which they hope to bring it down by 2-3% by the end of the next economic year. A growth of 2.65 % has been observed in their total income from the operations to Rs 8, 529.30 crores in the first quarter of 2011-2012, against Rs 8, 309.18 crores from the same quarter last fiscal. Maruti India’s most anticipated hatchback New Maruti Swift is going to be launched on August 17th, this year apart from the launch of New Maruti 800 as well.

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